A Fianna Fáil Senator has said reducing the rate of capital gains tax (CGT) on vacant properties could 'immediately' solve the housing crisis.

Aidan Davitt raised the suggestion in the Seanad yesterday, saying the CGT rate should be reduced from the standard rate of 33% to 10% on a one-year basis.

Last year's Census data showed that while the number of vacant dwellings had fallen by 15% since 2011, there were still 183,312 vacant houses and apartments (excluding holiday homes) around the country.

Vacancy rates around the country range from almost 30% in Leitrim to around 4% in South Dublin.

The proposed change to the tax rate would only apply to vacant houses, and the sale of currently occupied properties would not be affected.

Senator Davitt - who is also an auctioneer - explained that the usual suggestions around vacant housing include renovation incentives, compulsory purchase orders, or "other threats".

He argued: "A far more suitable way to get houses back to the market that, for example, have not been in use for over two years would be to apply a reduced rate of capital gains tax. It is the way forward and it would encourage people to sell these houses.

"Currently, a third of whatever profit these people might make in their houses would go in capital gains tax [...] If we reduce the rate on these properties, it would bring a steady flow of houses to the market that are not there currently."

He estimates that between 10,000 and 15,000 property owners would take advantage of the change.

Seanad Leader Jerry Buttimer responded: "The Senator is correct in that creativity and imagination should be used to fix the situation around voids and vacant houses, and every consideration should be given to the matters he raises on the issues of taxation and capital gains tax. That should be looked at."

The suggestion was sharply criticised, however, by People Before Profit TD Richard Boyd Barrett, who called it "totally mad".

He said: "Slashing capital gains on the sale of vacant properties will just provide another opportunity for vulture funds and property speculators to snap up more property and rent it out at extortionate rent levels.

“If we are not to see a further deterioration in an already disastrous situation, we need emergency legislation to ensure the transfer of vacant property to local authorities, and stringent, water-tight rent control and security of tenure measures.”